Stimulating Housing Markets

We study temporary fiscal stimulus designed to support distressed housing markets by inducing demand from buyers in the private market. Using difference-in-differences and regression kink research designs, we find that the First-Time Homebuyer Credit increased home sales by 490,000 (9.8%), median home prices by $2,400 (1.1%) per standard deviation increase in program exposure, and the transition rate into homeownership by 53%. The policy response did not reverse immediately. Instead, demand comes from several years in the future: induced buyers were three years younger in 2009 than typical first-time buyers. The program's market-stabilizing benefits likely exceeded its direct stimulus effects.     

Towards a More General Approach to Trade Liberalization

Despite the frequency with which they have been promoted as a model of development. East Asian trade policies have had little influence on the normative economics of trade reform. In contrast to directly dismantling protection, developing countries have often provided concessional import rights which override existing protection. These instruments include EPZs and duty remission. This paper accommodates these instruments of 'new trade liberalization' within a more general understanding of trade liberalization illustrating their similarities and their differences. Both old and new trade liberalization can, on their own, bring about complete free trade. Needless to say, so far, neither has!     

THE USEFULNESS OF IMPERFECT ELECTIONS: THE CASE OF VILLAGE ELECTIONS IN RURAL CHINA

Using a sample of rural Chinese villages, which have recently been the subject of democratic reforms, we look for relationships between marginal changes in the democratic process and marginal changes in economic outcomes. We find that even very poorly conducted elections can have large incentive effects. That is, even corruptible elections provide leaders with strong incentives to act in the interests of their constituents. Our findings also allow us to rank the importance of four possible election reforms, which have attracted the attention of international observers and academic researchers.     

Investor behaviour in a nascent capital market: Scottish bank shareholders in the nineteenth century

This article uses the records of nineteenth‐century Scottish banks in an attempt to understand investor behaviour in the early British capital market. It presents four main findings, some of which do not conform to the basic assumptions of standard asset pricing theories. First, in an era when efficient portfolio diversification was not possible, the intrinsic risk of an equity security was an important input into investor decision‐making. Second, our evidence suggests that businesspeople initially regarded bank stock as a consumption good, as being a stockholder gave them privileged access to bank finance. When bank lending practices changed in the middle of the century, this access‐to‐credit advantage associated with owning bank stock largely disappeared. Third, investors typically exhibited a bias towards banks that conducted business in the areas where they resided. Fourth, a sizeable proportion of investors were stockholders in more than one bank.     

Substitutes for legal protection: corporate governance and dividends in Victorian Britain1

Companies in Victorian Britain operated in a laissez‐faire legal environment from the perspective of outside investors, implying that such investors were not protected by the legal system. This article seeks to identify the alternative mechanisms that outside shareholders used to protect themselves by examining the dividend policy and governance of over 800 publicly traded companies at the beginning of the 1880s. We assess the importance of these mechanisms by estimating their impact on Tobin's Q. Our evidence suggests that dividends and well‐structured and incentivized boards of directors may have played a role in protecting the interests of outside investors.     

Academic Workers and Union Membership: An Inevitable Dilution of Solidarity?

The growth of service employment and new forms of work has supposedly fostered the diffusion of individual orientations at the expense of traditional forms of union solidarity. These developments suggest that academics are likely to manifest an individualist orientation and a weak attachment to trade union membership. Based on a survey of unionized employees in a university setting, we examine whether there are differences in union attachment and solidarity between professionals and other occupational groups.